The Federal Reserve has cut interest rates by 25 basis points and announced the purchase of $40 billion in short-term U.S. Treasury bills, aiming to enhance liquidity in the financial system. While this dovish move is seen as a positive for markets, the crypto sector remains cautious about a bull market resurgence, especially with the holiday season approaching, traditionally a period of low liquidity.
Crypto options data indicates that over 50% of positions are set to expire by the end of December, with Bitcoin's key pain point at $100,000 and Ethereum's at $3,200. Implied volatility for major terms is declining, reflecting reduced expectations for market fluctuations this month. Notably, the skew has shown a persistent negative bias, with put options priced higher than calls of the same delta, driven by a stable market favoring covered call strategies and increased demand for protective puts amid market weakness.
Overall, the crypto market is experiencing low liquidity and subdued sentiment, with a slow decline being the prevailing outlook. However, traders remain vigilant for any unexpected positive developments that could trigger a market reversal, despite the low probability.
Fed Cuts Rates by 25 Basis Points, Crypto Market Remains Cautious
Disclaimer: The content provided on Phemex News is for informational purposes only. We do not guarantee the quality, accuracy, or completeness of the information sourced from third-party articles. The content on this page does not constitute financial or investment advice. We strongly encourage you to conduct you own research and consult with a qualified financial advisor before making any investment decisions.
